Top Business Loan Brokers: Do You Need One?

Top Business Loan Brokers

Borrowers can connect to business loan brokers who will connect them with lenders. This gives them multiple options for financing through one application. Brokers are there to help borrowers get the best rates and terms possible, often at no cost.

This is our list of the top six small-business loan brokers for 2022.

1. Lendio

Lendio has more than 300 lenders and offers a fast application process and funding. We consider it the best overall broker for business loans. Lendio has financed more than 300,000. This totals more than $12 billion. Lendio allows you to apply in just 15 minutes and receive funding within 24 hours. Lendio is free and there are no fees.

Lendio allows you to access a variety of funding options, including:

  • Lines of credit
  • Equipment Financing
  • Loans for short-term
  • Finance for accounts receivables
  • Paycheck protection program loans
  • SBA loans
  • Credit cards for businesses
  • Commercial mortgage loans

Lendio offers an online service, but there are also physical branches in the United States that can be contacted for business financing discussions. Depending on the loan product chosen, credit scores and business time requirements can vary. Borrowers must be in business for 12 months and have a personal credit score of at least 650. However, businesses that don’t meet these requirements may still be eligible for loans through Lendio.

2. LendingTree

LendingTree can be a great option for qualified borrowers. Its network of lenders competes for the borrower’s business to ensure that the borrower receives the best rates and terms. LendingTree doesn’t charge fees to the borrower but it does charge fees to lenders to join the network. These fees could be passed on to the borrower. Please check before you close.

Lending Tree provides access to the following types and funding options:

  • SBA loans
  • Loans for short-term
  • Lending to long-term customers
  • Credit for business lines
  • Working capital loans
  • Equipment Financing
  • Finance for accounts receivables
  • Merchant cash advances

LendingTree points out that lenders might consider credit scores as low as 500. There may be higher rates and fees. Credit scores of 680 or higher are required by most banks and credit unions in LendingTree’s network.

Also read: Top 10 Business Credit Cards for Startups

3. SmartBiz

SmartBiz has a large network with a focus on term loans and SBA loans. SmartBiz claims that 90% of its applications are approved by its network of lenders. SBA loans are available at rates of 4.75% to 7% on amounts between $30,000-$5 million. Repayment terms range from 10 to 25 years.

SmartBiz’s network also funded loans for the paycheck protection program (PPP), in addition to SBA loans. The company’s network has financed nearly $4 billion in SBA7(a), PPP, and bank term loans.

SmartBiz provides access to these types of financing:

  • SBA loans
  • Term loans
  • Commercial real estate loans
  • Nontraditional business loans

SmartBiz uses soft credit to start the application. After the application review is complete, a hard credit check is performed. Businesses must be in business for at least 2 years. A credit score of at least 640 is required for loans above $350,000. Owners will need to have a minimum credit score of 675 in order to get larger loans.

4. National Business Capital

National Business Capital provides access to loans similar in terms to SmartBiz’s, but with slightly more qualifications. National Business Capital requires that the borrower is in business for at most two years, has an annual gross sales of at least $100,000, and has a credit score of 685 or better to qualify for an SBA loan. National Business Capital also offers a product called Hybridge(r), an SBA Loan product that acts as a bridge loan while funding the SBA loan.

National Business Capital provides access to a variety of financing options, including:

  • Credit for business lines
  • Equipment Financing
  • SBA loans
  • Finance for accounts receivables
  • Financing for startups
  • Franchise financing
  • Commercial mortgage financing
  • Purchase offer financing
  • Asset-based lending

National Business Capital doesn’t require you to be in business for a minimum amount of time or have a good credit rating to get equipment financing through its network. For business lines of credit, however, you must be in business for at least one year. A business must have at least $120,000 in gross annual sales to qualify for either. Although there are no upfront fees, you should be aware of fees that lenders may charge borrowers.

5. Biz2Credit

Biz2Credit provides many options for companies looking to get funding through loan brokers. Biz2Credit offers another option. Applications take less than 4 minutes, and loans are funded within 24 hours. Biz2Credit has helped over 200,000 businesses get funding. It offers loan amounts of $25,000 to $6,000,000. There are term loans available up to $250,000 and working capital loans up 2 million. Commercial real estate loans (CRE) loans can be up to $6,000,000. Except for CRE loans which can be funded in as little as 30 days, funding can occur in less than 24 hours.

Biz2Credit provides access to a variety of financing options, including:

  • Term loans
  • Working capital loans
  • Commercial real estate loans

For working capital loans, Annual revenue must not exceed $250,000. The annual revenue requirement for working capital loans must be at least $250,000. Borrowers must also have a minimum of six months in business and credit scores of at most 575. The revenue requirement for term loans is the same as for borrowers with credit scores of at least 660 and a company that has been in business for at least 18 consecutive months.

6. GoKapital

GoKapital will finance any business that has at least $30,000 per month. GoKapital is a great choice for borrowers with low credit scores. GoKapital will approve your application in just 2 minutes and give you immediate access to funds. Some lending products require a minimum of one year of business and $30,000 per month in monthly revenue. However, in SBA 7(a), loans through GoKapital are more qualified. Two-year-old businesses must have at least $250,000 in annual revenues and profitability. The loan will be closed in three to six weeks.

GoKapital’s brokerage offers the following loan products:

  • Cash advances for businesses
  • Credit for business lines
  • Unsecured business loans
  • Equipment Financing
  • SBA 7(a), loans
  • Commercial real estate financing

GoKapital offers loan options to low credit-score borrowers and also offers loan offers to high-risk industries. This includes funding for cannabis-industry businesses, medical businesses, and eCommerce businesses.

Also read: Franchise Financing: 6 Best Options for Franchise Business Loan

How Financing with a Business Loan Broker Workes

For businesses that are looking into multiple funding options, most loan brokers will conduct a soft credit check. After the borrower has chosen the best loan option, the lender will conduct a hard credit check. The application process for most types of lending is quick, with funding within 24 hours.

Who Should Work with a Business Loan Broker?

Small businesses who don’t have time to visit banks to seek funding are well served by business loan brokers. They can also be a funding alternative for businesses that have been turned down by traditional lenders. These businesses might consider using a loan broker to obtain their next loan.

  • Newer businesses: Brokers may be able to offer many options for new businesses that aren’t offered by traditional lenders.
  • Subprime borrowers with poor credit: Brokers have greater access to lenders which allows them to locate lenders who will lend to these borrowers.
  • Rejected borrowers for financing: Brokers can help companies find non-traditional and online lenders who will finance their loan products if traditional lenders aren’t available.
  • Businesses in high-risk industries: There is still an industry like the cannabis industry that traditional lenders can’t or won’t finance. A loan broker can help you find specialist lenders for high-risk sectors.

Disadvantages of Business Loan Brokers

Businesses may encounter higher closing costs and fees when working with a broker to help them obtain loans. Although many loan brokers do not charge fees directly to the borrower they charge fees to their network lenders. These fees can be passed on to the borrower which leads to higher monthly payments.

How we Evaluated Small Business Loan Brokers

You will find that there are higher closing costs and fees when you work with a loan broker. This could be because the company is high-risk or that a traditional lender has turned down the loan application. The borrower may be savvy and want multiple options to find the best rates and terms.

When ranking the top 2022 loan brokers, we considered five factors:

  • Loan types offered: Each broker has its own funding specialization and loan options.
  • Minimum qualifications: You can see a list of qualifications and their restrictions.
  • Industries served: Brokers can specialize in certain industries, or serve a broad range of customers.
  • Online reputation: Ratings for each company, and red flags to borrowers
  • Transparency in terms and fees: Brokers are open about upfront costs and how much they get paid

Bottom line

All loan brokers on this list can help companies secure multiple types of funding. However, Lendio is our top choice for the year 2022. It offers a wide range of lenders that offer quick approvals and funding.

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